Abstract:
Purpose: The major aim of this study was to identify most important and different factors
responsible for the cost overrun in the construction industry. It basically correspond to include
various factors to be studied in great details that based different management and regulatory
contexts.
Methodology: The study involved the use of questionnaires filled by 100 respondents from 10
construction companies of Karachi. The respondents belonged to different age groups, different
income level, job experiences, and job level and residing in different areas. The integration of
data was conducted by using SPSS which further was analyzed by Principal Component and
Factor Analysis (PCFA).
Findings: The complete analysis ofthe data reveals different contributing factors responsible for
the cost overrun that may further cause delay in competing respective projects within time. These
three most significant factors that are responsible for cost overrun include improper managerial
applications with the factor value of 0.905 followed by raw material-fluctuation in price and
inadequate financial management with the factor value of 0.865 and 0.816 respectively. In that
respect, the secondary source of data is also evaluated based on identifying the context of
different kinds of projects completed or under process.
Practical Implications: It is observed that one of the major factors contributing cost overrun in
the construction companies include improper managerial applications which is then followed by
raw material-fluctuation in price and inadequate financial management. Based on this analysis,
it is suggested to make suitable measures for avoiding these issues that subsequently form the
basis of overall cost overrun in the projects. It correspond to involve systematic design and
regulation of management which preferentially include the context of effective strategic design
and implementation, proper management and planning which correspondingly involve frequent
coordination and use of professional approach from the respective professional representatives
working in the construction companies.
